Smoothest Deal to Date

[Derek DeVerna]

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $97,500
Cash invested: $45,300

I move to neighborhoods that I want to do more business in. There is simply no better way to learn an area. This is a duplex deal within 4 blocks of my home/brokerage that we acquired off the MLS after one of our out of state investors passed on the opportunity. We were able to rehab and stabilize both units within a two month period despite it being a disadvantageous time of year to list. This has been perhaps our smoothest deal to date.

What made you interested in investing in this type of deal?

Proximity to home/real estate brokerage.

How did you find this deal and how did you negotiate it?

MLS. I paid full list price.

How did you finance this deal?

Commercial lender financed 80% of the purchase price. I paid cash for the downpayment and rehab costs.

How did you add value to the deal?

I spent over $12,000 rehabbing both units.

What was the outcome?

Our team was able to stabilize both units within a two month period. $500+ Monthly Cashflow.

Lessons learned? Challenges?

Our having to run new LVP flooring throughout the entire upstairs due to the hardwoods not being economically salvageable caused us to go over budget. We are unable to rip all of the carpet up before closing on a deal so this should be expected sometimes. The amount was easily covered in our reserve fund budget for these type of "unexpected" issues that arise during rehab projects.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

My brokerage and rehab team are the most cost efficient in Toledo.